'Fast Money' Recap: Confusion in the Market

NEW YORK (TheStreet) -- The S&P 500 sold off early but recovered somewhat before ultimately closing lower by 0.40%. 

On CNBC's "Fast Money" TV show, Tim Seymour, managing partner of Triogem Asset Management, said Thursday's selloff had less to do with issues in Portugal and more to do with investors who feel complacent with their stock positions. He added that investors continue to fear missing out on more upside. 

Karen Finerman, president of Metropolitan Capital Advisors, said investors have not seemed "panicky" so far when selling. She added that the market is still too expensive to buy, but not at a good level to sell short. 

Brian Kelly, founder of Brian Kelly Capital, said selling U.S. stocks because of Portugal is wrong. Instead, he did not like the retail sales results that were released Thursday along with the economic numbers from Japan, Germany and France. The global economy is not as strong as we thought it was a few weeks ago, he said. 

Steve Grasso, director of institutional sales at Stuart Frankel, said there is confusion in the market, not panic, and that's notable by investors buying utility stocks, as they search for yield.

Kelly said investors can keep watching the iShares Nasdaq Biotechnology ETF (IBB) as a leading indicator for the broader market. 

Seymour said Microsoft (MSFT) is no longer a cheap stock, based on valuation. However, investors continue to find safety in large cap technology stocks. 

Kelly said he likes Microsoft, which pays a handsome dividend and has low volatility. Grasso said the momentum technology stocks need to make new highs in order for the large-cap technology stocks to continue moving higher. 

Paul Miller, managing director at FBR Capital Markets, there is a lot of "good news factored into banks," and thinks the sector will head lower as interest rates stay low. He added that rates are likely to stay lower longer than many investors anticipate. He likes Wells Fargo (WFC) but does not like Bank of America (BAC), JPMorgan Chase (JPM), Morgan Stanley (MS) and Citigroup (C). 

Kelly agreed with Miller's assessment. Seymour did not agree, arguing there will be some "major positive surprises" from the banks in the upcoming earnings quarter. 

Finerman was optimistic as well. Specifically, she said Bank of America's low valuation indicates that a lot of good news is notfactored into the stock. Grasso said Wells Fargo trades at a premium to the other banks because it does not carry the same types of risks. 

Seymour said Chevron (CVX) "looks very interesting right here" with its solid dividend yield and production growth. 

Mike Dudas, senior research analyst at Sterne Agee, said gold is seasonally strong between June 30 and Oct. 31. Gold prices could reach up to $1,500 per ounce during that stretch this year, he said. He added that gold has good fundamentals and a bullish chart. As for the miners, he likes Agnico Eagle Mines (AEM) and Coeur Mining (CDE). 

Seymour prefers Barrick Gold (ABX). Kelly likes silver, gold and the miners. Grasso said he is long the Market Vectors Gold Miners ETF (GDX). 

Seymour said he continues to like Gap (GPS), which has solid supply-chain management and strong future sales in China. 

Finerman said it would be interesting to see more M&A deals in the industrial space following the reported offer from ZF Friedricshafen for TRW Automotive Holdings (TRW). 

Grasso said investors who are buying Verizon Communications (VZ) solely for its dividend yield should look to utility stocks instead. Specifically, he likes Southern Company (SO).

Kelly said Tractor Supply Company (TSCO) appears to be nearing a bottom, but he is worried about downside risk in Home Depot (HD) and Lowe's (LOW). 

Dan Niles, founding partner of AlphaOne Capital, is long Intel (INTC), arguing that increased PC demand will benefit the company. The last time the PC market showed positive growth was in the first quarter of 2012, he said. In the third quarter of 2014 it may very well show growth once again. The stock has a low valuation, a solid dividend and the PC market is not dying off, he reasoned. 

Kelly said he likes both Intel and Microsoft. 

Seymour cautioned investors to consider taking someprofits in certain large-cap technology stocks like Intel and Microsoft. The valuations are no longer as cheap as they once were and earnings per share estimates have not risen. 

Coach (COH) fell 1% and was the first stock on the show's "Pops & Drops" segment. Finerman said the turnaround story for the company has yet to begin.

Sarepta Therapeutics (SRPT) fell 13%. Grasso said he no longer likes to buy individual biotech stocks following his purchase of Clovis Oncology (CLVS), so he suggested investors use the IBB ETF instead. 

Cray (CRAY) jumped 16%. Kelly said to buy the stock on a pullback. 

L Brands (LB) dropped 3%. Seymour said investors who are currently long should not sell their position.

Finerman admitted that SunEdison (SUNE) did not have a low valuation and is volatile, but reasoned that the fundamentals are improving. She is long the stock. 

Seymour said he likes rooftop solar stocks such as SolarCity (SCTY). 

Kelly said he sold his long position in the Consumer Discretionary Select Sector SPDR ETF (XLY). 

Bob Wetenhall, an analyst at RBC Capital Markets, said the home renovation trade is running out of steam. While he likes Masco (MAS) for its opportunity to complete a tax-free spinoff and focus on higher-margin businesses, he believes the company will miss its upcoming earnings estimates. He has an outperform rating on the stock with $24 price target. 

He also likes Mohawk Industries (MHK), but said he would rather buy the stock on a pullback. He has an outperform rating on the stock with a $154 price target. He also likes Fortune Brands Home & Security (FBHS). 

Grasso said he is a buyer of KB Home (KBH) and Seymour is a buyer of Cemex (CX).

Grasso says he's a "big fan of content," which Disney (DIS) has. The stock also has a nice chart and investors can stay long. 

Kelly does not like Groupon (GRPN) but said the stock looks like it is trying to bottom. He suggested using $6 as a stop-loss for investors who are long.

For their final trades, Seymour is a buyer of Chevron and Grasso is buying Intel. Kelly said to buy the iShares MSCI Brazil Capped ETF (EWZ) and Finerman was simply not a buyer of Lands' End (LE).  

-- Written by Bret Kenwell in Petoskey, Mich.

Follow @BretKenwell

Follow TheStreet.com on Twitter and become a fan on Facebook.

 

Bret Kenwell currently writes, blogs and also contributes to Robert Weinstein's Weekly Options Newsletter.

More from Jim Cramer

Finding Stocks Right for You: Cramer's 'Mad Money' Recap (Friday 8/25/18)

Finding Stocks Right for You: Cramer's 'Mad Money' Recap (Friday 8/25/18)

Jim Cramer: The 10-Year Yield Could Go to 2.75%

Jim Cramer: The 10-Year Yield Could Go to 2.75%

Replay: Jim Cramer on the Markets, 10-Year Yield, Oil Prices and Foot Locker

Replay: Jim Cramer on the Markets, 10-Year Yield, Oil Prices and Foot Locker

Video: You Could Live in a Ritz-Carlton or St. Regis Home

Video: You Could Live in a Ritz-Carlton or St. Regis Home

Jim Cramer: Intuit Had a Fantastic Quarter

Jim Cramer: Intuit Had a Fantastic Quarter